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Figure No. 20 – Frequency of Loan
The general purpose of taking loans for business
units is to arrange liquidity to finance operational
needs of business and for expansion. Many small
businesses witness difficulty in their growth mainly
due to lack of credit. The main purpose of loan is
to maintain healthy cash flow in business and so
as to make payments to the suppliers on time. The
common purposes of taking loan by entrepreneurs
are start new business, acquisition of assets,
acquisition of technology, expansion of business /
activity addition, for managing working capital, for
repayment of the other loan, improvement of the
premises etc.It is found that majority (35%) of the
respondents have taken Mudra loan to start a new
business, followed by 29% beneficiaries who took
loan to expand their business, whereas 11% of the
respondents have taken Mudra loan for managing
the working capital requirements (Figure No. 21).
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